Wall Street bailout: legitimate rescue, creeping socialism, or both?

Cries of financial socialism and criticism of the Treasury’s planned bailout were heard loudly from Capitol Hill, yesterday. James Politi of the Financial Times joins The Takeaway to assess the comments and the epithets.

Guest: James Politi, Financial Times writer

Producer’s notes:

It seems Congress may be stealing a page from the recent film epic, “There Will Be Blood.” Suggestions of state-sponsored socialism or communism behind the big capitalist bailout are the stuff of the politics of fear. The de-regulating evildoers were out there, but if you listen to members of Congress, none of them was behind this mess. It seems neither were the American people who ran these companies, exploited their fellow Americans and overseas workers, and sponsored golf outings and champagne barbecues.

Before the Internet (which suggests an age for some who existed before time itself), newspapers used to include a Sunday section of cartoons, called “the funnies.” This was an olden time when corporate profits and dividends rose six percent in a good year and folks were happy with their dividend checks, knowing that their equity accounts held long-term promise. Business models fit with the image of long-term growth and of golden years promising a low-tech existence, with card games and golf. In the go-go 90’s, Bill Clinton and his ambitious late trade secretary, Ron Brown, blew that model up, reaping lobbying and campaign rewards for Democrats, and pushing global trade agreements that sent manufacturers to Mexico and China. Then the Republican Tom Delay de-reg boys took over and the big game was on. Technology, cheap oil and a 24/7 business cycle brought the promise of cheap worldwide labor, exhaustion, domestic rightsizing and ten to fifteen percent profits that sent retired day-trading union members to Schwab rooting for profits against their still-employed 401(k), rank-and-file buddies.

Now amidst the credit collapse, the chickens have come home to roost — for all of us who screamed silently, “Full speed ahead!” We’ve Enron’d ourselves, and, as Congress looks to punch someone other than the mythic Bin Laden in the mouth, we should hark back to the funnies and the cartoon “Pogo.” This pen-and-ink alligator looked at American life with witty word balloons as he paddled around his mythic swamp.

Right now a six-percent return on investment looks pretty good. So let’s bring back the past as Congress screams for blood and remember Pogo’s dated pre-Internet refrain:

“We have seen the enemy, and he is us.”

?Bruce Reznick